Posted
by
samzenpus
on Monday April 22, 2013 @01:10PM
from the show-me-the-money dept.

Bismillah writes "Excite Mobile in South Australia also set up a fake debt collection agency, and a fictional complaints body for late-paying customers. The company sent fake debt collection letters to 1074 customers, even going so far as threatening to confiscate the toys of their customers' kids if they didn't pay up. From the article: 'South Australian mobile phone provider Excite Mobile has been found guilty of false, misleading and unconscionable conduct by the Federal Court after the ACCC took action against the company for faking a debt collection agency, creating a fictional complaints body, and misrepresenting scope of mobile coverage.'"

Yeah, this isn't a problem in America. In other countries, businesses will jockey around the law and do things like this. In America, they change the law first to make it legal, or at least make them legally not culpable (i.e. move the burden of verifying legitimacy on the recipient of debt collection notices).

True, but a corporation can only be this evil because there's no specific accountability to the people who own the corporation. Corporations act as a shield for individual liability, that's their only real purpose. If the people who own a corporation were exposed to the same legal and financial risks, they probably wouldn't do half the shit they do.

The financial liability is limited to the company's assets -- if it runs out, they cannot continue into the pockets of the owners.

The difference is seen with companies like insurance, where the owners are also underwriters, so their assets are on the line. Some old money in Britain lost their estates when Lloyds of London made some bad tanker and space launch bets that year.

In any case, criminal activity isn't necessarily limited to the company -- it applies (that is the actual reason for the corp in in-co

The financial liability is limited to the company's assets -- if it runs out, they cannot continue into the pockets of the owners.

It wasn't until relatively modern times where a "company" could kill someone and nobody in the company would face criminal charges. It's not just financial liability, but criminal liability as well. And if the owners have any managerial duties (day to day management, not just directorship), they can be held financially liable. Though that's usually done for tiny private companies, I've not heard of anyone in a publicly listed company being held liable because of any ownership, it is theoretically possibl

It wasn't until relatively modern times where a "company" could kill someone and nobody in the company would face criminal charges.

[citation needed]

I've not heard of anyone in a publicly listed company being held liable because of any ownership, it is theoretically possible, but has never happened (except for actions taken while a paid employee unrelated to any ownership).

It doesn't have to be this way. In the UK, sure, the majority of the time very large fines are set; fines large enough to send the company under, but these are for small crimes and a fine is proportional.

I recieve HSE (Health and Safety Executive) reports weekly as part of my job. The HSE are independent regulators of all work related health and safety issues.

Here are some extracts from 2013 reports:

Optima (Cambridge) Ltd was fined a total of £63,000 and ordered to pay costs of £16,000. D

I doubt most of the owners knew or approved of this, put specific people who worked for the corporation did. They should be the target of criminal charges. Having them go to jail would be a better deterrent then some financial liability spread among the owners.

I doubt most of the owners knew or approved of this, put specific people who worked for the corporation did. They should be the target of criminal charges. Having them go to jail would be a better deterrent then some financial liability spread among the owners.

from the article:

"Excite Mobile directors Obie Brown and David Samuel were also found to have created a fake complaints company"

and

"The ACCC will further seek injunctions, penalties, costs, and a five-year disqualification for Brown and Samuel from operating a company."

"The ACCC will further seek injunctions, penalties, costs, and a five-year disqualification for Brown and Samuel from operating a company."

I'm sure they'll just have some other entities operate various things for them if that comes to pass. If various guys can manage regional organized crime and gang business from prison, surely they fellows can arrange to have strings pulled on their behalf as free men.

in most countries in the west(or far-west like australia) performing such fraud actually usually ends up in having the persons who did it tried in criminal court. and end up with limitations on running a business so they have to find someone to act as a shell person for their next fraud. usually it's in a lot smaller scale of course than a telecoms company.

just having shares on something though.. the shareholders should sue the management in this case, I doubt their sec(equivalent) filing included "in the 3

It is (or was; it's being forcibly wound up now) a privately-held "Australian Proprietary Company, Limited By Shares" - not publicly traded, no public shareholders, and limited to a maximum of 50 private shareholders.

Quite likely the only shareholders were the 2 directors who have been singled out as being "knowingly concerned" with the deceptive and illegal practices. I'd look, but the ASIC and government websites seem to have closed off the couple of holes that allowed you to see the shareholdings of P/L

Except for the purposes of being tried and sent to jail, of course... Then they are merely the vessels into which Hard Working Real Americans invest their retirement savings, and you wouldn't be mean enough to steal the food from Grandma's mouth, would you?

MPAA doesn't have a problem stealing food from grandma's mouth right? With all of the incorrect accusations of them stealing movies when all they had was an IP address and sent out a form letter. Maybe I should have posted it as "Corporations are people."

I don't know how it's in the US or Australia but in my Western country the executive(s) are specifically liable for the company's actions.

Especially their own illegal or irresponsible actions - but not limited to their own either. Owners of corporations may in fact also be liable [here], depending on circumstances and ownership. It's far too complicated to go into detail here, I work with the law for a living in my European country.

That's true in America as well, it's just the bar is quite high, so that it rarely comes up. But there are scenarios like fraud when selling to the government itself where they're going to find someone to put in prison.

The ACCC is Australia's consumer watchdog agency, unlike previous watchdogs they have big enough teeth to do a proper job. They don't just go for small stuff and fraud they also go after the anti-competitive practices used by large corporations, eg: they stopped Apple from making exclusive deals with phone companies and basically told them to sell to everyone or don't sell at all.

This is the level of fraud that does get criminal actions against executives or the board. The OWNERS are grandmas who have mutual funds with hundreds of stocks. They had no knowledge of any wrongdoing. In the end, the owners (stockholders) end up being victims when the company goes bust.

Absolutely. However, it may be difficult to prove that specific individuals were liable for criminal acts (it may not be, I don't know the specifics of the case). It may not be possible to prove who was criminally liable for this action.

Absolutely. However, it may be difficult to prove that specific individuals were liable for criminal acts (it may not be, I don't know the specifics of the case). It may not be possible to prove who was criminally liable for this action.

If I remember the script correctly, it goes like this:

If you ask about the powerless peons in the phone cubes, then they were just following orders.

If you ask about the C-levels, then it was the powerless peons acting outside the knowledge or authorization of management.

If the opposing attorney is particularly good; both are true simultaneously, and it's an instance of Schrodinger's malfeasance, which is simultaneously committed under orders and committed without due authorization.

Actually, it is a matter of what happens in court. Actually, in all probability the breakdown will be between middle management and upper management. Obviously these two levels are both going to insist that their trials be separate from each other. Then the middle management will insist that they were following orders and when they questioned the legality they were assured that it had been cleared through legal. There may even be documentation supporting this claim. However, the Upper management will insist

Excite Mobile are an MVNO (Mobile Virtual Network Operator) who dont own any infrastructure themselves. Their business model depends on being cheaper than the big 3 (Telstra, Vodafone and Optus) which often leads to having to use questionable business practices to stay in the black... Which is what happened here.

What isn't wrong, is that they sent letters of demand to late paying customers. They had every right to do this, even to use a debt collection agency (after a reasonable time) to recoup the loss. This is fine.

What they did wrong was to set up a fake debt collection agency (deceive customers) and send out threats to confiscate property that did not legally belong to them. Only a court order can order a debtor to hand over their own property to pay a debt and the court does not do this readily.

The second thing they did wrong was to set up another fake company, this time a complaint handling service that had an official sounding name, "Telecommunications Industry Complaints" that was internal to Excite Mobile which again deceived customers. What makes this particularly bad is that "Telecommunications Industry Complaints" sounds very similar to the official government body for regulating the telecommunications industry, the "Telecommunications Industry Ombudsman" who deals with high level complaints about telco's and has real power to hand out fines. So it was a deliberate attempt to mislead customers that an authoritative body was dealing with their complaints when it was not and an attempt to prevent customers from contacting the ombudsman (by confusing them between "complaints" and "ombudsman").

What is good here, is that Excite Mobile was caught and is being punished.

What isn't wrong, is that they sent letters of demand to late paying customers. They had every right to do this, even to use a debt collection agency (after a reasonable time) to recoup the loss. This is fine.

Not so sure about that being fine, as this below was also in the article.

Additionally, the company told customers mobile service was available at their premises when it wasnâ(TM)t, including in indigenous communities.

The Federal Court upheld the ACCC's claim that Excite Mobile's âoeday capâ clause was unconscionable. The clause meant any customer making more than one two minute call per day would get charged excess fees over the monthly contract charge, which it did not disclose.

Excite Mobile also included a $75 cool off fee on its contracts as well as a $195 charge for returning a damaged phone.

So you have a contract where you have no coverage or if you do have coverage making more than a 2 minute phone call will generate excess fee's and even if you want to cancel they charge you for that too.

These late payments are not the usual problem of customer not having the money but customers receiving outrageous bills over and above their contracts or not getting the service they were promised.

I was referring specifically to the late paying customers, not their other dodgy business practices (which are very dodgy).

So you have a contract where you have no coverage or if you do have coverage making more than a 2 minute phone call will generate excess fee's and even if you want to cancel they charge you for that too.

I don't see how it isn't part of the same issue, why else the phoney (sorry) regulator if not to pretend to address the issue of customers who (quite rightly I would say) thought they were getting ripped off.

I seriously doubt anybody would expect to get anywhere with an industry watchdog if it was just a case of the customer not paying for service received. If the bills were legitimate the real regulator would rule in favour of the company and a real court would rule in favour of the phone company allowing

I'm convinced that phone carriers are the spawn of Satan. The ones in the US aren't any better than this and may in fact be worse on many levels. I've worked for two of them and the shit I've seen still keeps me up at night.

I tend to lean more libertarian but every time I recall my past experiences with these fuckers I start screaming for regulation. Just the fact I pay 3 times what Europeans do for half the service is enough to make me want to hang the bastards from trees and through rocks at them.

I recommend looking at Ting. It's really changed the way I think about cell phone providers (namely: because I used to think they were all collectively evil bastards with the primary goal of screwing you, now I only think they *mostly* are that.:p)

Ting uses the Sprint network which I am actively trying to get off of. I have dialup speeds in my area and they aren't even putting Idaho on the map for LTE yet. Ting might have good service/plans etc but since they are literally using Sprints network it's still garbage.

Ah, fair enough. Yeah, they can't help coverage, since they don't control it. Sprint has great coverage in my area, just crap service and mediocre prices.

I was just saying, there is at least one phone service provider that actually still believes in the power of proper customer service and low prices to get people interested, instead of just saying "everyone else antagonizes and rips off their customers in an attempt to make more money, so why not us too?" Whether they cover your area or not is irrelevant.

Set strict rules for campaign contributions, to make sure that corporate "donations" are not a deciding factor in who gets elected. Like other humans, politicians often carry out the orders from the one who pays them.

I'm pretty sure that they can't repossess something for which no money is actually owed unless it was used as collateral for money that can't otherwise be retrieved.

The great thing about really 'downmarket' collections strategies is that you only use them on powerless poor people, so your...creative scope...is considerably broader than it might be under other circumstances.